Riding The Gravy Train

Beating the markets is fun and profitable. This is how we do it.

Tuesday, July 29, 2014

long FAZ, Market Update


We've been enjoying summer and hope you have too. 

As the market creeps slowly higher towards an inflection point we've had little interest and nothing to offer herein.  Now we finally enter a new position. 


FAZ has broken a considerable downtrend, so we're going long without a stop level for the time being.  This is an effective 3x levered short on the U.S. financial sector. 





We displayed the charts below in a post dated March 15 2014 titled History Repeats, Shorting Commodities.

Based on these charts, we expected a turn lower in equities roughly two months later circa May of this year.  It's now July and the DJIA is a mere 400 points higher, a gain that can easily be erased in 2-3 days.  While the market has gone higher and past our target date, we'd say that if we're off by 2 months on a cycle that's roughly 4 years in duration that's a direct hit.


All technical indicators we rely on have become more bearish from sentiment to momentum, so it seems an ideal time for equities to drop.  Click the charts to view larger versions.





At the time we wrote: "There hasn't been a two-month drop in the DJIA since late 2012, and in that case the 2nd month was barely lower.  The last time there was a significant drop in two successive months was at the end of the 2007-2009 market plunge in February 2009.  A significant two-month drop will probably happen again this year."

We stick by that call emphatically. 





http://www.GoldPriceDirection.com




We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.

Thursday, March 27, 2014

Crossed Lines - GLD, GS, NASDAQ


One measure we read recently had bullish sentiment at a 26-year high. 

It should be no surprise that this is likely marking a material top, especially to those who considered our posting dated March 15.

The tech-heavy NASDAQ has been leading the charge lower, with yesterday's close putting it back in the red for the year so far, as some of the most darling and highly-speculative stocks have posted the biggest losses of late.



Since early March NFLX (Netflix Inc.) is down 18%, GOOG (Google) down 8%, TSLA (Tesla Motors) down 18%. 

It's not just happening on the NASDAQ.  Again since early March LNKD (LinkedIn Corp., when is the last time you heard that site mentioned?) down 13% (down 28% since September and at 9-month lows), FB (Facebook Inc.) down 16%, TWTR (Twitter Inc.) down 21% (down 40% since late December and back to the same level as its first day of trading), DDD (3-D Sys Corp.) down 26% (down 41% this year), VJET (Voxeljet AG) down 32% (down 63% from its November highs), XONE (Xone Co.) down 27% (down 50% from its January highs), etc. etc.


Most ominously in our view, GS (Goldman Sachs Group Inc.) is again closing below its 200-day moving average.  A little lower, and it'll be printing a new low for the year so far. 



Here's gold (GLD) in a one-year view:



Here's gold (GLD) in a nine-year view:


There's a better than even chance that gold's 9-year uptrend, which lasted basically its entire bull market, will be broken. 

















We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.

Monday, March 24, 2014

Current Strategy, buying QID


As noted previously, we have existing market shorts (primarily TZA and VXX) which are below our entries but will serve their purpose and likely offer profits once markets turn down in earnest.  That time is overdue and, we believe, upon us or nearly so. 

In the meantime, despite showing losses on those hedge positions, thanks to many winners our portfolios are at all-time highs and in the case of stocks, including those paying dividends if applicable, that are far higher than our entries we're putting tight stops on at least a portion of holdings if not selling portions or entire positions outright.  "It depends."

Ideally, we sell enough to effectively make the remainder free of cost and we'll adopt an additional market short position. 


QID looks set to break its downtrend, as seen on the chart below, though we caution it has not yet done so. 



A close above $58 would seal the deal, and we'd be buyers at that point with a stop at $54.40 which is just below recent lows.

















We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.

Wednesday, March 19, 2014

Updates: OTS +30% and EIL +50%


We first wrote about OTS (Canadian Oilfield Solutions Corp.) exactly a year ago. 

It's been an odd year for the company since then, which included the stock being halted for over 7 months as financials were being restated.  This turned out well, as it was halted while the vast majority for stocks on the Venture Exchange collapsed, and since trading again in December is up materially and closing at multi-year highs.  It's up 30% since our first mention.

OTS continues to look extremely bullish, so we continue to hold our shares above the lower line of its trend channel, shown in the chart below.   

Technical resistance appears to be between $0.25 and $0.30:





Six months ago we presented this chart of EIL (Empire Industries Ltd.), showing a 3-year trend line broken: 




It's up 50% since then.  We still have our shares, and the chart is still very bullish:



Both OTS and EIL trade in Canada on the Venture Exchange. 







http://www.GoldPriceDirection.com/Results





We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.

Saturday, March 15, 2014

History Repeats, Shorting Commodities


This chart shows the MACD of the Dow Jones Industrial Average:


The chart can be clicked to view a larger version.

The sections indicated are the exact same length of time.  The 1-2-3 pattern occurs during each bull market.  

The only thing missing now is for the "fast" blue line to cross below the "slow" red line. 

Don't worry, it's coming.  History repeats.


Here's how the above applies to the DJIA:




This past week was the first time in almost two years that the DOW closed each of the week's five days in the red.  It won't be another two years before it happens again.  It will probably happen within two months.

There hasn't been a two-month drop in the DJIA since late 2012, and in that case the 2nd month was barely lower.  The last time there was a significant drop in two successive months was at the end of the 2007-2009 market plunge in February 2009.  A significant two-month drop will probably happen again this year.



News Item:  In-the-know insiders are dumping stocks



Almost a year ago, we offered the idea of shorting commodities via DEE (Powershares DB Commodity Double Short ETN).

Just over a month later, we posted that the downtrend had been broken and we were adding to our position.

Here's how it looks now:



That chart, coupled with the fact that bullish sentiment and large speculative bets in commodities are at bullish extremes and levels normally seen before a crash, keep us very bullish and comfortable in our double-short commodities DEE position.







http://www.goldpricedirection.com/results





We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.